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Nirio Mendoza GEOS 543C
Best Practices and Projects StagesFall 2009
University of Arizona
Geosciences Department
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Nirio Mendoza GEOS 543C
Best Practices and Projects StagesFall 2009
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Outline
Rio Tinto history Analysis of strengths
Analysis of weaknessesCurrents facts
Assessment and conclusions
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Making profit selling fools gold?
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1 Minas deRio Tinto
2 Rhodesiancopper belt
A broad geographic spread of operations
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HistoryThe Rio Tinto Company founded at 1873 by HughMatheson when acquired Minas de Rio Tinto
At the end of 1880s leading the World market for sulfur and copper.In 1925 Sir Aucklan Geddes nominated as chairman.
At 1920s decided take part of newly-discovered NorthernRhodesian copper belt .
At 1930 established American subsidiary Pyrite CompanyIncorporated to produce Cu, Zn, Pb, iron sinter.
At 1954, two-third of the Spanish business was sold. At 1962, created The Rio Tinto-Zinc Corporation (RTZ), asthe result of a merger British The Rio Tinto Company andthe Australian The Consolidated Zinc Corporation.
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History (cont.)Between 1962 and 1968, discoveries and development of many projects were executed: Palabora (Cu) in SA, Rossing(U) in Namibia, etc., also acquires Borax Group.
At 1995, the RTZ Corporation PLC and CRA (Conzinc RioTinto of Australia Limited) unify as a dual listed company.
At 1997, again changed name: The RTZ Corporation PLCbecame Rio Tinto plc (based in the UK) , and CRA Limitedbecame Rio Tinto Limited (based in Australia).Between 2000 and 2007: coal, aluminium, iron ore, diamondswas acquired, added further strength to Rio Tintos alreadyexceptional resource base.The last acquisition for $ 38B was the Canadian aluminiumproducer Alcan Inc., becoming the global leader inaluminium .
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Initial Strengths (from 1873 to 1954) Landscape with huge ore resource
Oligopoly, market power Strategic operational engineer to survive during the pyrites world introduction of railroadsteam shovels
Strategic alliances in Iberia (1878), America Pyrites Producers (1884?),and European Pyrites Producers (1928), also with the chemical and
fertilizer producersStrategic renegotiation of term of purchase, although they had paidless the real costHighly capitalized international firm, with borrowing low costStrategic boards changes , after Matheson and Fielding , Geddes stage characterized by high-order entrepreneurial
ability to perceive new productivity opportunities Delegation responsabilities , attractive promotion, bonus to hire highskilled crew.Diversification; as consequence of necessity?
Recovery sulfur from smelter was gasIron contaminated with Pb, Zn
Opportune adventure in Rhodesian copper belt
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Initial Weakness (from 1873 to 1925)
Matheson-Fielding era: Low-order entrepreneurial,focused to exploit full potential of the Minas de RioTinto. No single executives had scientific or engineer trainingLow cost open- air calcinations teleras method to
recovery low grade copper: First anti-smoke leagueExtravagant initial production by human and mulesspower Staff concentrated on improving existent methods
instead of look for alternatives Activities totally centralized or diffuse
When they decided to enter into a large scale production, but with notsupported human resource
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Open- air calcinations teleras heap roasting method Rio Tinto Mine (1890)
http://upload.wikimedia.org/wikipedia/commons/4/47/Teleras.jpg -
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Currents facts
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A consistent and successful strategy
www.riotinto.com
Always looking for themaximization of shareholder value
Diverse and high operationalexperienced boards
Strategic international and localmulti-team group working sinceinitial stage: Case of Madagascar
Landscape with high potential
High standard: health, safety,environments and communityresponsibilities
Ready to satisfied the growingmetal consumptions
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Recent earnings strength continues Strength in diversity
Positive finance
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Rio Tinto has a strongpipeline of Greenfieldopportunities for the nextgeneration of projects
Future operations
1st Expansion Brownfield
2nd Greenfield exploration
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Assessment and Conclusions
Multicommodities
Value based on its landscape
Multitask international teamHigh operational experiencedboards
Viable collaborative relationswith the community